Asset Price

Asset Price

The amount one pays for an asset when buying it. The price represents the amount of value the market has assigned, fairly or unfairly, to an asset. Normally, prices are expressed in terms of money, but this is not always the case; for example, one may trade four chickens for two sheep.

Asset prices tend to be regulated by the law of supply and demand; that is, the price of an asset increases with smaller supply and/or greater demand. A corollary to this is the idea that commoditization drives prices down because it increases supply (sometimes vastly) while leaving demand the same. Prices likewise rise when the value of money declines. Governments can and have controlled the prices of certain assets by subsidy or decree. This is usually an anti-inflationary measure and tends to distort, rather than eliminate, the law of supply and demand. It is thus not generally sustainable as a mechanism for controlling price.
References in periodicals archive ?
Asset Price Dynamics, Volatility, and Prediction is ideal for students of economics, finance, and mathematics who are studying financial econometrics, and will enable researchers to identify and apply appropriate models and methods.
The period of asset price sluggishness is partly a function of government policy, and the level of stimulus as well as demand enhancement measures that it introduces determines how long the duration of sluggishness.
Here, I am specifically referring to a line of research that tries to be precise about what it means for an asset price to be too high and to explain when and why this might happen.
Moreover, stress tests conducted by the Federal Reserve on the largest banks routinely feature large declines in asset prices, suggesting that those institutions are positioned to weather asset price changes without having to significantly pull back on their lending activities.
The study, therefore, contributes to the existing literature on the issue of stable money demand function in Pakistan by using asset price index to explain the money demand in a multivariate regression model and VECM for the time period 1981Q1-2017Q2.
Why do households and institutions hold certain assets, and what effect do their asset demands have on asset prices? The traditional approach in asset pricing specifies models of optimal consumption-savings behavior and tests these models with data on aggregate or individual consumption of households, as well as asset price data.
The short-term variance of asset price follows a mean-reverting process.
There is no clear economic definition of what makes an asset price bubble.
In this pivot-less monetary system, there is no strong and stable demand for high-powered money such that low (but variable) growth in supply would mean sound money conditions broadly (interest rates both short and long market-determined, goods and services prices in general reverting to an unchanged mean over the long-run though fluctuating considerably in the short run, and no great episodes of asset price inflation).
ABSTRACT: The aim of this article is to demonstrate how monetary disorder spawns asset price inflation.
Moody's Global Asset Price Monitor Q3 2016 report, which analyses price trends in equities, bond markets, property, foreign exchange and private credit, found that asset prices are at elevated levels in advanced economies (AEs), while emerging market (EM) prices show fewer signs of overheating.
Capital inflows resulted in asset price appreciation in many EM countries and created a dilemma for policymakers.